Summer markets-Sue and Ron Mortensen

The crops have entered the heart of summer. The yield determining season of July and August is still to come. Conditions vary widely, from wonderful in many parts of Iowa and Nebraska, to spotty and slow in North Dakota, Ohio, Indiana and other places that were planted later. As is usual at this time, the weather forecasts vary by day.

Market participants are still somewhat obsessed with last week’s USDA stocks number. A number of analysts have weighed in with their assessments-mostly regarding how unreliable the numbers have become. Today, even a senior COFCO (a Chinese state-run grain trader) sharply criticized the USDA’s numbers. Indeed, 300 million bushel swings-either bullish or bearish-have become the norm in the past year.

There is another group which seems to be saying “it is what it is.” That’s not a bullish or bearish comment, but merely a comment that stewing about it isn’t going to help and everyone needs to move forward.

The cash market still provides evidence of tightness, with basis levels tightening since the shock of the report wore off. Plus the lower prices have stimulated interest from China and other buyers. It’s a classic-lower prices means increased demand.

The acreage numbers have been filed in the backs of peoples’ minds, as many have come to realize that it is the harvested acres this year which will be so important. Past and present flooding makes these numbers subject to change. It may be October (when the RMA has acreage data available from crop insurance policies) before the acreage question is resolved. That is a long time to wait for answers.

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